Common Law Employees?

[Gilmore]

A property management company maintains a 401(k) plan. As part of the agreement between the management company and the property's owners, the management company has the responsibility to employ, supervise and direct, and fire all employees of the Property. In addition, the management company determines the actual number of employees that the property will need.

In some cases the employees are named employees of the management company. In other cases they are named employees of the property's LLC, partnership, etc. In all cases they are again, hired, fired, and directed by the management company.

The management company considers all of these employees as common law employees and thus able to participate in the management company's 401(k) plan.

It sounds to us like they are all common law employees by definition, but the fact that some are employees of the property has raised some question.

As always, thanks for any opinions.

[Guest DWL]

I'm a little skeptical. If the management company is hiring, firing, etc. as agent rather than as principal, I'd be a little hesitant to conclude that it's the common-law employer. This may be a case where you can structure the employment relationship either way but you're stuck with the form you choose.

[Gilmore]

Thanks!